At Xerox, Mulcahy Passes Torch to Burns

For most of corporate America, the coveted CEO position remains a male-dominated domain. So, it's not an everyday happening when one woman gets to hand the reins to another, but that's exactly what's going on at Xerox Corp. (NYSE:XRX). When Anne Mulcahy retires as CEO on July 1, Ursula Burns will fill her shoes.

Burns has worked her way up from a summer internship as a mechanical engineer in 1972 to her current position as president. But Burns takes over at a critical time when the company still has some challenges to overcome. The Norwalk, Conn.-based company has seen its first-quarter revenue fall 18% year-over-year while its stock dropped nearly 50% over the last year during the global economic crisis.

Xerox, however, is certainly in better health since its dark days nearly a decade ago when some media outlets were predicting bankruptcy, as it was stymied by accounting irregularities that forced the company to restate its earnings between 1997 to 2001. Additionally, at the time, the company did not have a diverse revenue stream, existing primarily as a photocopying business. It is Mulcahy who gets the credit for rescuing the company from accounting anomalies and sagging sales.

"As CEO, Anne successfully led a multibillion-dollar turnaround of Xerox and transformed the business into an innovative digital technology and services enterprise," says N.J. Nicholas, Jr., lead independent director of Xerox's board of directors.

Mulcahy orchestrated a flurry of deals, divesting some units and adding others, including the $32 million purchase of mortgage documentation company Advectis Inc.; the $1.5 billion purchase of Global Imaging Systems Inc. in 2007; and the $174 million purchase of litigation electronic processing firm Amici LLC in 2006.

Mulcahy seems to have no qualms about leaving Xerox to Burns.

"Ursula takes on the leadership role the old-fashioned way," says Mulcahy. "She has earned it. And, for that, she has my deep respect and confidence." - Gerald Magpily

Comments

[Conifer Cove:]

Reading all the stories about Ann Mulcahy and the multi-billion dollar turnaround she engineered at Xerox one would think she walks on water. When she became CEO on August 1, 2001 the stock was at $8.13. Today it closed at $6.78, a drop of over 19%. And that is after slashing employment, crippling employee morale and treating retirees like chaff. What a record. The good news is she leaves with tens of millions in her bank account.

May 23 06:58 PM

[nevjohn:]

I don't understand this hype about Mulcahy. Over her time at Xerox, it has steadily become a nonentity in the industry. Whereas HP and Canon have market capitalizations of $80 bn and $40 bn respectively, Xerox is stuck at $6 bn.

As the previous poster notes, Xerox stock has basically fallen over the last 8 years of Mulcahy's tenure. Hardly a record anyone can be proud of.

Xerox does not even try to compete in the major growth areas anymore. Just seems to be happy trying to be a niche company, whereas once it could challenge the big boys in all areas.

Quoting the lead director of the firm for an opinion about the CEO sure is a great way to get an objective opinion!

May 25 01:17 PM